The target man: Interview with energy minister Charles Hendry
Meeting our environmental targets and our need for energy is a difficult balancing act. Max Gosney asks energy minister Charles Hendry how it will be done.
Government commitments to cut carbon emissions by 80% by 2050 and to achieve 15% of our energy from renewable sources by 2020 are, by any standards, daunting. Where and, more importantly, how this will happen is the business of Charles Hendry MP, Minister of State for the Department of Energy and Climate.
When questioned about these targets, however, he says: "I've always been very critical of targets. Of course government needs to have an ambition and its job is to aspire to do better, but alongside that, they have to be realistic. So what we've done in the renewable roadmap is to say these are the technologies that deliver 90% of the way to 2020 and to look at where the barriers are to their development."
These barriers, of course, include serious doubts over whether the current technologies designed to allow renewables to make up a greater share of the energy mix are technologically capable of doing so. When asked this question, Hendry says: "I totally agree. The work we've been doing in the offshore wind sector has been on how we can bring down the cost by 40%, so we set up an industry-led task force whose aim was to bring down the cost to £100 per MW/h, making it much more competitive. We expect the costs for offshore wind to start coming down significantly and new technologies are driving that cost reduction. At the moment, people are seeing whether they can develop a 6,7, or even 10MW wind turbine that can work effectively offshore and, as that technology becomes more established, it can make a big difference."
A strong position
He continues: "At the moment, what's tended to happen is that they've taken an onshore wind turbine technology and seen how they can develop it offshore. What we're increasingly seeing now is the development of a true offshore wind turbine industry. By leading on the cost reductions, the UK is in a strong position to lead that work. We can also do more to encourage the manufacturing expertise and the manufacturing jobs to come to the UK as well."
Another area in which the Minister sees potential for growth is in the rise of the nuclear industry, to which the Government has committed itself. He says: "The scope for the UK to lead development in this area is greater than it's been for many years. We have been actively removing the barriers to investment in new nuclear. I think we are certainly the most interesting place in Europe and one of the most interesting places in the world when it comes to opportunities for new nuclear development." Eight nuclear sites are proposed by 2025 and Hendry claims that fears over an energy shortfall in the interim are misguided.
Another area for which Hendry is responsible is the question of energy savings and efficiency in industry. "We do still have some of the cheaper energy prices in Europe," he says. Figures suggest otherwise, with UK manufacturers paying the fifth highest electricity prices in the EU according to DECC. Yet the statistics are distorted without factoring in energy efficiency says Hendry. "If you look at the cost per unit we're still cheaper than most. But if you look at how many units we consume because we're less energy efficient than other countries we end up using more."Here, he believes, is an opportunity for industry to save itself money and reduce its carbon footprint. He says: "If you look at the cost per unit [the UK] is still cheaper than most. But if you look at how many units we consume because we're less energy efficient than other countries we end up using more.
"People occasionally say that when we're talking about energy efficiency we're berating people, we're being condescending and they've done it already." The Government's real intention is to spur further energy savings, the minister adds. "Last year we decided to cut our carbon footprint at DECC by 10%. Without spending anything at all just involving all our staff – we've cut it by 20%."
Even so, the Government has taken measures, says Hendry, to address the burdens imposed by the cost of energy, pointing to the fact that the Autumn Statement tabled a £250m energy rebate from 2013 for "energy intensive" manufacturers. "The measures are designed to protect some of those companies that are strategically important to the UK and are most affected by high prices."
Clearly, the balancing act between maintaining the energy supply at a cost that keeps UK industry competitive and shifting energy generation to more sustainable technologies is never going to be an easy one. Equally, it is no exaggeration to say that, unless the balance is found, the UK engineering industry will pay a high price.
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